Battle for stake in Korean bank

>A BATTLE royal is under way for a major stake in

Shares in the country's sixth-largest bank, level at 14,150 won, have more than doubled in recent months as investors position themselves to profit from the scrap.

The favourite contenders are HSBC and emerging-markets rival Standard Chartered. While neither will confirm they are in the running, both have made plain their desire to expand in Korea.

Also said to be in the frame are Citibank and Temasek, the Singapore government's powerful investment arm. Temasek has been active of late, bypassing its partheld bank DBS Group to buy stakes in two Indonesian lenders.

A Korean Press report on Friday tipped HSBC and StanChart as leading the pack. A 36.6% stake in KorAm has been put on the block by private equity outfit Carlyle Group and investment bank JP Morgan.

The duo picked up the stake during the financial crisis in the late 1990s and agreed to hold it for a minimum three years. That lock-up is now coming to an end.

StanChart arguably has something of a head start. It has been gradually building up a separate, direct stake in KorAm this year and now holds just under 10%, the second-largest shareholder.

Observers expect KorAm, Carlyle, JP Morgan and their advisers to whittle down the four reported contenders to just one or two.

The wider Korean market was level as profit-taking in lead bank Kookmin offset gains elsewhere. Kookmin, which rallied on Thursday, was clipped back by 1150 won to 46,950 won as investors locked in gains. The Korea Composite Stock Price index rose 0.74 points to 813.84.

Tokyo investors were treated to data before the market opening that showed strongerthenexpected growth in the last quarter. But that spelt weaker, not stronger, stock prices.

The Nikkei 225 shed 170.61 points to 10,167.06 as the robust figures sparked a rally in the yen against the dollar, which put the skids under exporters.

Office equipment maker Canon lost 90 yen or 1.8% to 5020 yen, tyremaker Bridgestone shed 10 yen or 0.7% to 1392 yen and consumer products giant Sony was knocked by 120 yen or 3% to 3810 yen.

Nippon Telegraph and Telephone bucked the trend after earlier this week raising its full-year targets. It rose 1000 yen to 513,000 yen.

Hong Kong exporter Li & Fung took a hit after one of its major customers, retail giant Wal-Mart, sounded a cautionary note on US consumer spending. The stock fell 5 cents or 0.4% to HK$13.45.

Developers went the other way on hopes for a sustained turnaround in local property prices. Sun Hung Kai Properties put on 75 cents or 1.2% to HK$65, sector bellwether Cheung Kong traded at HK$62, up 50 cents or 0.8%, and Henderson Land Development rose 10 cents to HK$32.10. The Hang Seng index slipped 3.34 points to 12,224.23.

Indonesia failed to find a firmer tone despite a positive assessment from the International Monetary Fund, which said Jakarta was hitting growth, inflation and budgetary targets. Pressured by profit-taking, the Jakarta Composite index dipped 4.188 points or 0.7% to 610.448.